Mexico relaxes fuel-efficiency rule to quell legal threat

Source: Thomson Reuters Foundation - Fri, 18 Jan 2013 02:16 GMT

Author: Reuters

By Alexandra Alper

MEXICO CITY, Jan 17 (Reuters) - Mexico announced a relaxed fuel-efficiency rule on Thursday for locally sold cars as it seeks to alleviate the concerns of automakers that have filed legal challenges that could derail the country's efforts to curb carbon emissions.

The government is seeking to apply to its own fleet regulations similar to those in the United States and Canada, pushing for a fuel-economy rate of 14.9 km per liter, or 35 miles per gallon, by 2016.

Toyota and other automakers with a strong presence in Mexico, the world's eighth largest car producer, sued the government last year when the first version of the rules was presented, and succeeded in halting their implementation.

The Mexican Auto Industry Association had complained the original proposal was stricter than the U.S. version.

The modified version gives carmakers flexibility similar to that allowed in the United States. For example, a company can apply credits from a year in which it more than meets efficiency requirements to a year in which it misses the targets.

"It's indispensable for us to align these standards," the new environment minister, Juan Jose Guerra Abud, told a news conference.

The controversy highlights resistance by Mexico's manufacturing sector to the low-carbon regulations Mexico has been trying to introduce in the past few years.

Early last year, then-President Felipe Calderon's administration had to tweak the climate change bill to ease industrial concerns before it c o uld win congressional approval.

Mexico has an ambitious target of cutting greenhouse gas emissions by 30 percent by 2020, and 50 percent by 2050.

The energy sector accounts for up to 70 percent of Mexico's emissions and almost 30 percent of that share is transportation-related.

Reducing the amount of fuel necessary to move Mexico's fleet is an important step for the country to reach its target, the government contends.

Guerra Abud, who took office last December in the Cabinet of the new president, Enrique Pena Nieto, said neither carmakers nor environmental groups had seen the revamped proposal, but had been informed of its principles.

"We are all in agreement that (with) this rule ... we are not making emissions standards more flexible, but we are granting flexibility to the rule that the United States is already giving to companies," Guerra Abud said.

Abud said some of the lawsuits were being withdrawn and hoped the rule, which does not require congressional approval, could take effect by January 2014.

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